Assessing the Influence of China's WTO Accession on Global Stock Market Volatility, Cross-border Financial Policies, and Supply Chain Realignments

Abstract

This study examines how China's WTO membership affects global stock market volatility, FDI, and supply chain realignments to understand its effects on global economic patterns and financial flows. The 2001 WTO membership of China changed global trade, investment, production, and market behaviour. This mixed-method study examines China's WTO accession's many effects quantitatively and qualitatively. In a 2001–2022 dataset, a VAR model shows dynamic variable interdependencies. Stock market returns (SMR), volatility (VOL), interest rates (IR), and inflation rates spread economic shocks across interconnected markets in this model. VAR shows financial volatility and how past stock market returns affect future markets. For context, the study uses qualitative data from 100 policy documents, trade agreements, company reports, and 50 in-depth interviews with policymakers, industry experts, and business leaders. Complex feedback mechanisms in financial markets show that past stock market returns statistically affect future volatility and returns. Regional economic shocks affect stock markets worldwide, demonstrating global financial integration. China's changing role in the global economy is explained by quantitative financial analysis and qualitative policy and industry insights. This study examines China's policy shift's multi-layered effects on markets, supply chains, and financial systems, unlike previous trade flow or FDI studies. These findings can help policymakers and business leaders, especially in emerging markets, design strategic reforms to boost economic resilience, attract sustainable FDI, and manage supply chain realignments. The study recommends forward-looking infrastructure investments and adaptive economic policies to capitalize on China's economic transformations and trade dynamics for long-term growth, stability, and competitiveness.